7 Positives for the UK Startup Scene from the Autumn Budget

Yesterday the Chancellor unveiled his budget plan for the UK.

The main headline was that we can expect slow growth (around 2%) for the next few years. And that Brexit seemed to be the principal cause of this. A gloomy budget indeed.

But, as ever, even in the murkiest river a nugget of gold can be found. With a little sifting, I’ve found some positive news for us spirited folk on the startup scene.

The sifting was very boring. I’ve tried to set out my findings as clearly as possible. So, you can enjoy the gold without getting your feet wet! You’re welcome.

The Treasury conducted a survey called ‘Patient Capital Review’ which set out to consider how to support innovative firms in getting funding and achieving scale. The conclusions drawn are positive and will be a boon for early-stage companies over the next 10 years.

These conclusions resulted in an ‘Action Plan’ in the budget which aims to unlock £20bn over the next 10 years to support growth in innovative firms.

The main points are as follows:

1. Tax Breaks (EIS & VCT)

– EIS allowance for people investing in ‘knowledge-intensive companies’ will double from £1m to £2m each year.
– ‘Knowledge-intensive companies’ can receive twice as much EIS & VCT investment each year. That’s a move from £5m to £10m.

(Check out a previous post for more info on the benefits of EIS.)
SEIS & EIS budget
Result: An estimated extra £7bn of investment.

2. Government-backed Co-investment Fund

– A £2.5bn Investment Fund incubated in the British Business Bank will be established to co-invest with the private sector.
Result: An estimated extra £7.5bn of investment.

3. Backing Fund of Funds

– The British Business Bank will invest in a series of private sector fund of funds.
Result: An estimated £4bn of investment will be unlocked.

4. Backing Fund Managers

– The British Business Bank will continue to back new and existing fund managers through its existing Enterprise Capital Fund.
Result: An estimated extra £1.5bn of investment.

5. Backing overseas investment into UK

– The Department of International Trade will support overseas venture capital into the UK.
Result: An estimated extra £1bn of investment.

6. Support for Regional Investment

– The British Business Bank will establish new investment programmes to support business angel groups outside of London. This will complement existing programmes like the Northern Powerhouse Investment Fund and the Midlands Engine Investment Fund.
– £21m is budgeted to expand Tech City UK’s reach across more regions.
Result: Unlocking of investment potential outside of the London hub.

tech city uk budget (1)

7. Other

– British Business Bank to investigate supporting Women Entrepreneurs getting access to equity investment
– £2.3bn increase in R&D spending
– £1m Games Fund to support video game development
– Helping Pension Funds invest in innovative firms
– Qualification for Entrepreneurs’ Relief will no longer de-incentivize accepting external investment

I hope all that makes sense.

It’s pleasing to see that, in difficult times, the government recognises the importance of supporting the innovation sector as a key driver of our economy.

If you want more detail on this Action Plan in the budget, I’ll be at the UKBAA National Investment Summit on 28th November. Keith Morgan CEO of British Business Bank will be leading the discussion on the Chancellor’s proposals.

You can get tickets here

Hope to see you there!

Women in Tech: Success & the Future…

We recently learned that Pivigo is one of 15 of the UK’s fastest growing tech companies founded by women selected to visit Silicon Valley.

The trip is part of an initiative to build ties with the US tech scene. The other firms heading to Silicon Valley include:

All are showing an annual growth rate of at least 118%.

Pivigo is a data science marketplace founded by the remarkable Dr Kim Nilsson. Their mission is to connect “…data scientists and businesses across the world…to revolutionise the way we work, live and stay healthy.”

Dr Kim left her role as an astronomer on the Hubble Space Telescope to complete an MBA and pursue a career in business. The move was a good one.

Since she founded Pivigo in 2013 the company has:

  • Raised nearly £1m in funding (£300k through our investors on Angel Investment Network!)
  • Become the world’s largest community of data scientists.
  • Completed over 80 data science projects to date. (Clients include KPMG, Barclays, British Gas, M&S and Royal Mail.)
  • Started Europe’s largest data science training programme S2DS (Science to Data Science). The programme supports career transitions of PhDs and MScs into data science roles.

pivigo data science women

Kim’s transition from academia to top founder is part of what makes her story so impressive and why, no doubt, she was a good choice to meet with executives from Apple, Google, Instagram and LinkedIn. Sherry Coutu CBE, the founder of Silicon Valley Comes to the UK, and the London Mayor’s office made the selection.

This link building through the UK’s most talented female founders comes at a time of high interest in the role of women in the growth of the European and UK tech sectors. Figures reported by LinkedIn and Founders4Schools show that:

  • Female-led companies have helped add £3bn to the economy over the past year.
  • The number of female-led companies with turnover of £250m+ grew by 14% in the same period.

But what about women business angels?

Despite the flourishing community of female founders and executives, only a small number are using their business acumen to invest in small businesses.

As a result, the UKBAA in partnership with Angel Academe, a network of female business angels, is conducting new research. They want to understand the barriers perceived by women about angel investing. The survey is being hosted and analysed by the the CASS Business School in London.

This research is also part of a their new Europe-wide project called “Women Business Angels for Europe’s Entrepreneurs”. The project will enable them to review the situation in Europe as well as the UK.

UKBAA logo women
The results will give important insight into how, as a community, we can engage more women in angel investing. Off the back of the research, the UKBAA plans to develop a programme with the goal of doubling the number of female angel investors in the UK over the next two years.

If you’re female and involved in startups, please do your bit for this iniative and fill out the 10 minute survey here.

Thanks!